NEW YORK 
A prominent Manhattan lawyer pleaded guilty Monday to using impersonations and fake documents to defraud hedge funds out of more than $400 million, a crime a judge said "disgraced the honorable profession of law."

Over the objection of prosecutors, U.S. District Judge Jed S. Rakoff permitted Marc Dreier to remain free on bail until his July 13 sentencing even though he faces a lengthy prison term by any measurement standard.

"By his own admission, he has shown he is to be ranked with those who have committed some of the most egregious frauds in history," Rakoff said.

His plea to charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud and money laundering came with no plea agreement with prosecutors, meaning he faces up to 145 years in prison without the expectation of leniency. The government has already informed the court that it believes federal sentencing guidelines call for life in prison.

It was a steep fall for a lawyer who headed his own firm, Dreier LLP, with 250 attorneys and a roster of clients that included celebrities, including retired football star Michael Strahan and former News Corp. publishing executive Judith Regan.

Dreier's fraud was revealed last year in spectacular fashion. He was first arrested by Canadian authorities in early December on impersonation charges after he tried to trick hedge funds into investing even more in his fraud, one that authorities say began around 2004. Freed on bail, he was arrested days later when he arrived in New York on a flight.

"He has disgraced the honorable profession of law," Rakoff said.

Speaking in a steady voice as he read from a statement he had prepared, Dreier recounted his crimes, saying he had cheated hedge funds, investment funds and several individual investors between 2004 and 2008 with the sale of fictitious securities. The government said Dreier received $670 million from the sales and that victims lost $400 million.

He admitted arranging meetings in which impersonations of representatives of businesses purportedly handling the fictitious securities would fool clients into believing the transactions were not fraudulent. He also admitted supplying fake financial statements to support the lies.

"I understood everything I was doing was illegal," Dreier, who turns 59 on Tuesday, said during the plea.

Assistant U.S. Attorney Jonathan R. Streeter told the judge that Dreier sometimes held parties attended by celebrities in which he asked prospective clients to invest in the fictitious notes.

He said at least one of the individual investors gave Dreier's company $1 million without understanding the nature of the financial transaction.

When the fraud collapsed, Dreier was in the process of looking for a way to open the fake transactions to a broader market so he could involve even more new customers, the prosecutor said.

After the plea, Streeter asked that elaborate bail conditions that have allowed Dreier to remain in his apartment under 24-hour armed guard be revoked and that he be immediately incarcerated.

The judge considered options for more than an hour, listening to Dreier lawyer Gerald Shargel and two trustees handling Dreier's estate before finally ruling he could remain under house arrest until sentencing.